Stockman: Trump Is a ‘Hopeless, Mercantilist Protectionist’

welcome back to cheddar business
everyone on Monday saw the Dow suffer
its worst one-day drop since January 3rd
while the SP and the Nasdaq hadn’t seen
a day like it since early December
joining us now is David Stockman he’s
the former director of the Office of
Management and Budget under President
Ronald Reagan he’s also the author of
peak Trump the under a noble swamp and
the fantasy of manga David it’s great to
have you on chatter happy to be here
look a huge sell-off yesterday right
what do you make of the escalation of
the trade war between the US and China
well I think yesterday was a wake-up
call I don’t think this trade war is
going to end anytime soon
you got two fundamentally incompatible
economies you have a policy being driven
by you know a guy who’s you know lost
his lunch I think Trump has no clue what
he’s doing he’s sliding by the seat of
his pants he’s a hopeless protectionist
he doesn’t really know what he wants and
he has no clue how this is going to
unfold so I think we have big trouble
ahead
so why do Republicans the party of
Reagan right why do they seem to be
going along with Trump I think they’re
going along with Trump because the GDP
was had a three in it last quarter and
because we’re at the end of a business
cycle where the whole economy looks good
my point in peak Trump is the peak is
behind us the market peaked last
September at 29 41 we’re now triple peak
I don’t think we’re going back the
economy’s in month 118 of the longest
weakest expansion in history we got
headwinds everywhere we got a federal
debt that’s out of control we have a Fed
that waited way too long to tighten and
now doesn’t know what to do
we have Europe which i think is rolling
over into another recession we have what
I call the red ponzi and China’s
struggling with 40 trillion of debt none
of these things suggest there’s smooth
sailing ahead I think they all suggest
that there’s a huge risk that some kind
of Black Swan or orange Swan is the case
maybe is likely to upset the whole apple
cart you have to assume that recessions
haven’t been outlawed
and what’s going to happen when we get a
recession and the markets way up in the
stratosphere and the federal budget is
already running 1.2 trillion of red ink
and then revenue falls and expenditures
soar we’re gonna have the biggest mess
you can ever imagine so given all these
headwinds that you listed out you said
recessions haven’t been outlawed do you
think this is do you think Trump is
aware of these factors do you think he
feels the pressure to get a trade deal
done with China do you think he’s
capable of getting a deal done that will
be beneficial for US markets no I think
he’s delusional he thinks he has far
more power that he’s far more skilled at
the art of the deal in negotiation that
than he really is and so I don’t think
any deal is going to get done at all and
I think he believes the economy is far
stronger than it actually is because
we’ve had some aberration in the numbers
which aren’t sustainable in other words
we’ve had some inventory build-up and
we’ve had all this turmoil and trade
that pulled imports forward if you
strain that out the economy is growing
at less than 2% a year it’s not a boom
if you actually look at Trump’s first 28
report cards on jobs 200 2,000 per month
Obama‘s last 28 report cards before the
election
220,000 per month there’s been no
acceleration there’s no boom what we
have is an aging business cycle this
company to the end of the road and we’ve
done nothing to get prepared for the
trouble that’s ahead what is the Fed
going to do the interest rate is only
two point four percent and Trump is
complaining its balance sheet is still
almost four trillion what is the fiscal
policy going to do when we’re already
locked in to a borrowing rate at the end
the tippy-top of a business cycle of 1.2
trillion a year we’ve never been in
these circumstances before and so
therefore I think we have to get over
this recency bias which says well last
couple quarters look pretty good so
what’s to worry there’s everything to
worry because the last 30 years have
been taking us to a point of
much speculation in so much debt now
remember we had the financial crisis
people don’t even remember that anymore
but we did have it in 208 and they said
it was a wake-up call we got too much
debt we need to deleverage right well
there was 53 trillion of debt on the US
economy then this is mid 208 public
private business households government
today it’s 72 trillion all right we went
from 53 trillion which was too high to
73 trillion we’ve added 20 trillion debt
that did give us the kind of you know
appearance of a recovery in prosperity
but really we only doubled down and now
we’re gonna face the music in a far
weaker position with a madman in the
Oval Office who’s home alone and what I
mean by that is who are his advisers
nowadays okay I mean Steve minuchin is
an 80-pound political weakling who gives
yes-men a bad name okay Larry Kudlow has
been snorting bullish ethers down on
Wall Street for so long that he’s not
even in the economist Peter Navarro
would rather have a real war with China
rather than a trade war and you know
Wilbur Ross may have a heartbeat or not
I don’t know but he’s he’s as bad in
terms of trade policy as Trump so it’s
all being run by Bob light Howser who I
know from way back when I was on Capitol
Hill and in the Reagan White House in
the early 80s he’s a lifelong swamp
creature who wants to make government
bigger and better and more intrusive and
that’s the kind of trade deal he wants
it’s really for a big business it’s not
for jobs in the economy what do you
think Reagan would think of President
Trump he would be horrified he would be
horrified because Ronald Reagan was a
small government guy he was a free trade
guy he was a free-market guy he believed
in fiscal
you know rectitude and he was not for
hectoring the Fed for easy money when
Volker put on the brakes and interest
rates went into you know double digits
Ronald Reagan said we have to do it we
got to bite the bullet we got to get rid
of this inflation and let the Fed
restore sound money
so everything that Reagan stood for
Trump is really against okay
he is a hopeless mercantilist
protectionist he is the worst big
spender we’ve ever had in the Oval
Office on the Republican side and you
know he’s he’s a bombastic yes I guess I
go back to my earlier question I just
have a trouble understanding why
Republicans are buying into this and why
Republicans Senators and Representatives
don’t stand up for the party and stand
up for the legacy of the Republican
Party against Trump I could give you an
anecdote from my own history in January
1973 I was a young guy on Capitol Hill
Nixon was riding high he had won the
election 44 million – twenty-eight
million wasn’t a squeaker squeaker like
Trump but swept the whole electoral
college he told his whole cabinet you
got to resign I’m so strong I don’t need
you and within 18 months they had him on
the helicopter and sending him out of
town because the economy went down in
the interim in other words as long as
the economy was showing decent numbers
the Republicans kept quiet and when the
economy and the stock market went down
38 percent they were gone we only have
10 seconds for this answer but is there
a challenger to trump you’re behind
right now probably not okay well come
back when there is okay a former
director of the Office of Management and
Budget under President Ronald Reagan
he’s also the author of peak Trump he
under a noble swamp and the fantasy of
Nagas thank you so much for joining us

It’s Not Nice to Lie to the Supreme Court

The decision in the census case suggests President Trump can no longer take the court for granted.

A cynic might say that with his two major decisions on the last day of the Supreme Court term a week ago, Chief Justice John Roberts saved both the Republican Party and the court — first by shutting the federal courts’ door to claims of partisan gerrymandering, a practice in which both political parties indulge but that Republicans have perfected to a high art, and then by refusing to swallow the Trump administration’s dishonest rationale for adding a citizenship question to the 2020 census.

President Trump, having placed two justices on the Supreme Court, had taken to treating the court as a wholly owned subsidiary, and not without some justification. It was the court, after all, in an opinion by Chief Justice Roberts, joined by the other four Republican-appointed justices, that saved the president’s Muslim travel ban a year ago. But the chief justice’s opinion in the census case last week blew a hole in what appeared to be a protective firewall that the president can no longer take for granted.

I’m not joining the cynics, especially now that the citizenship question is dead — or so it seemed on Tuesday, based on the Justice Department’s assertion to the federal district judge handling a companion case in Maryland that the census forms were being printed without the citizenship question. On Wednesday, a furious President Trump ordered the Justice Department to reverse course; what followed was a telephone colloquy between that federal judge, George Hazel, and the lawyers for which the word bizarre is a breathtaking understatement. “I can’t possibly predict at this juncture what exactly is going to happen,” Joshua Gardner, a Justice Department lawyer, told the judge, who gave the administration until Friday afternoon to get its story straight.

It would take a heart of stone not to feel sorry for the administration’s lawyers, faced with defending the indefensible. As they recognized 24 hours earlier, the chief justice’s opinion in fact left no wiggle room. Once the behavior of Wilbur Ross, the secretary of commerce, was called out by the Supreme Court of the United States, the president was trapped — and now his lawyers are caught in his net. Maybe they can find a way around the chief justice’s decision, but I don’t think so.

Here’s why: Once the court rejected the administration’s stated rationale as phony — or “contrived,” as Chief Justice Roberts put it more politely in agreeing with Federal District Judge Jesse Furman that improved enforcement of the Voting Rights Act was not Secretary Ross’s real motive — the administration might have tried to come up with some other politically palatable explanation. That would almost certainly have failed, because courts generally will not accept what they call “post hoc rationalizations,” explanations cooked up under pressure and after the fact. But even if such a ploy had succeeded, its very success would have proved Secretary Ross to have been a liar all along.

The citizenship question is now history, fortunately, but this whole episode is too fascinating, too important for the country and the court, to put behind us just yet. So in this column, I want to probe the census decision itself, both for what it tells us about the court and for what it might suggest about the next test of the relationship between the president and the court that he has so recently regarded as his very own. That is the question of the validity of the president’s rescission of the program known as Deferred Action for Childhood Arrivals, or DACA, the Obama-era policy that now protects the “dreamers,” some 700,000 young undocumented people brought to this country as children, from being thrown out of the only country they have ever known. The court will hear that case in its next term, and there are some striking parallels with the census case that just might leave the Trump administration empty-handed again.

But first, the census case. I’ve been obsessed with imagining whatever dark night of the soul preceded the chief justice’s last-minute decision to shift course and reject the administration’s position.

I readily admit that I have no sources for the claim I just made. I have no proof that Chief Justice Roberts initially voted with the administration and talked himself out of that position sometime during the two months that elapsed between the April argument and the June decision. But I’ve been reading Supreme Court decisions for a very long time, and the opinions that provide the holding — the chief justice’s plus the partially concurring opinion of Justice Stephen Breyer for the court’s four liberals — have all the hallmarks of judicial tectonic plates that shifted late in the day to produce an outcome that none of the players anticipated at the start.

To begin with the chief justice’s opinion: The first 22 of its 28 pages are an argument for why the decision by Secretary Ross to add the citizenship question to the census was a reasonable one that fell squarely within his authority. Noting that Mr. Ross rejected the advice of Census Bureau experts and decided to proceed despite the risk of depressing the response rate, Chief Justice Roberts writes, “That decision was reasonable and reasonably explained, particularly in light of the long history of the citizenship question on the census.”

Then suddenly, on page 23, the opinion’s tone changes as the chief justice reviews the finding by Federal District Judge Furman that Secretary Ross’s explanation for why he wanted the citizenship question in the first place was a pretext. The official story was that it would help the Department of Justice — which was said to have requested the addition of the question — to better enforce the Voting Rights Act on behalf of members of minority groups. In fact, as Judge Furman determined from the evidence, it was Secretary Ross who solicited the Justice Department’s request, and whatever the secretary’s motivation, the reason he gave wasn’t the real one.

“We are presented,” Chief Justice Roberts observes dryly, “with an explanation for agency action that is incongruent with what the record reveals about the agency’s priorities and decision making process.” He continues:

“The reasoned explanation requirement of administrative law, after all, is meant to ensure that agencies offer genuine justifications for important decisions, reasons that can be scrutinized by courts and the interested public. Accepting contrived reasons would defeat the purpose of the enterprise. If judicial review is to be more than an empty ritual, it must demand something better than the explanation offered for the action taken in this case.”

Justice Breyer’s opinion, joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan, is almost as long as the chief justice’s. Nearly all of it reads like a dissent, arguing that Secretary Ross’s rejection of his own experts’ advice made the addition of the citizenship question unreasonable as a matter of law, “arbitrary and capricious” in the language of the Administrative Procedure Act. Only in Justice Breyer’s concluding paragraphs is there anything that reads like a concurrence: “I agree that the pretextual nature of the secretary’s decision provides a sufficient basis to affirm the District Court’s decision to send the matter back to the agency.” It’s hard to read these few paragraphs as anything other than a last-minute addition to a carefully crafted dissenting opinion, one that had rather suddenly become superfluous.

There were two other opinions filed in the case, one by Justice Clarence Thomas that was joined by Justices Neil Gorsuch and Brett Kavanaugh, and another by Justice Samuel Alito. Both disagreed vigorously with the chief justice’s bottom line. All four opinions scrupulously avoided any mention of what everybody knew: that documents brought to light in the weeks following the April 23 argument showed that the citizenship question was part of a plan not to help minority groups vote, but the opposite. The plan was to create and entrench Republican majorities in state legislatures by providing data for use if the Supreme Court gives the green light to counting only eligible voters in legislative redistricting. Conservative groups are poised to send such a case to the Supreme Court in the near future, part of a strategy to keep rapidly diversifying red states like Texas from turning blue.

There is no doubt that the justices were aware of this late-breaking development; during the days leading up to the decision, one of the plaintiff groups challenging the citizenship question had filed a brief with the court detailing the findings from the computer files of a recently deceased Republican redistricting specialist. If I’m right about the chief justice’s late-in-the-day change of heart, did these revelations play a part, even a subconscious one? That’s more speculation than even I am willing to engage in. Suffice it to say that it’s hard to imagine the administration’s litigating position undermined in a more devastating fashion.

It’s that observation that brings me to the DACA case. The court will actually hear three DACA cases, consolidated for a single argument and decision. All three are appeals by the administration of rulings that have barred it from carrying out its decision, announced in September 2017, to “unwind” the program. At issue are two Federal District Court opinions and a decision by the United States Court of Appeals for the Ninth Circuit that upheld a ruling by a federal district judge in San Francisco, William Alsup. The opinions differ slightly, but all found that the administration’s termination of DACA for the reason the administration has provided would violate the Administrative Procedure Act.

Here’s where the administration is caught. Its stated reason, as expressed by the acting secretary of homeland security on orders from the attorney general at the time, Jeff Sessions, was that DACA lacked statutory authority and was unconstitutional. At the heart of the administration’s appeal is the assertion that the federal courts lack jurisdiction to interfere with the “Executive Branch’s authority to revoke a discretionary policy of nonenforcement that is sanctioning an ongoing violation of federal immigration law by nearly 700,000 aliens.”

That is a very difficult position for the administration to maintain because it presents to the courts a question not of policy but of law. The administration would have a strong case for judicial deference if it described its rejection of DACA as a matter of enforcement priorities that differ from those of the previous administration. But by claiming that “the law is making us do it,” the administration is serving up the federal judges a question at the heart of their jurisdiction: What does the law require?

As Judge John D. Bates of the Federal District Court in Washington observed in his opinion, the administration provided only a few sentences of legal analysis to back up its claim. “This scant legal reasoning was insufficient to satisfy the department’s obligation to explain its departure from its prior stated view that DACA was lawful,” Judge Bates explained.

So the question is why the administration failed to offer a policy-based explanation, one that might well have persuaded the lower courts and eased its path to the Supreme Court. One reason might have been to protect the president, who declared shortly after his inauguration that “we are not after the dreamers, we are after the criminals” and that “the dreamers should rest easy.” The reason for going after the dreamers had therefore to be based on a claim of pure law, not a change of heart.

A more cynical explanation — and here I’ll indulge in the cynicism from which I refrained at the beginning of this column — is that in claiming that revoking the policy is required by law and not preference, the administration seeks to avoid accountability for a position that, if it were to prevail, would predictably cause economic disruption and public dismay.

Many policy positions predictably affect hundreds of thousands or millions of people; had Republicans succeeded in gutting the Affordable Care Act, for example, millions of people would have been thrown back into the health care jungle. But we don’t know their names. The DACA recipients, by contrast, have names that are known, not only to the Department of Homeland Security but to their schools, their employers, their communities. One dreamer recently received a Rhodes Scholarship and will not be able to return to the United States from Oxford if the administration wins its case. Others with less exalted achievements are simply getting their degrees, holding down jobs, paying their taxes, raising some 200,000 American-born children and going about their lives in the country they regard as their own.

The dreamers will still be here next April, when the census takers come around; the Supreme Court decision will almost certainly not be issued by then. They will be counted along with the rest of us in the grand decennial enumeration that the Constitution’s framers decreed. And a year from now, we’ll know whether the court that could see through one Trump administration strategy is willing and able to do it a second time.

Looks Like the Trump Administration Lied About the Census

The administration said it needed citizenship data to protect voting rights. New documents tell another story.

A trove of documents brought to the attention of the Supreme Court on Thursday makes it hard to see the Trump administration’s efforts to include a citizenship question on the 2020 census as anything but a partisan power grab.

The court will decide before the end of June whether Wilbur Ross, the commerce secretary, was justified under federal law in adding the citizenship question — a move that would nearly certainly lead to a serious undercounts of Hispanics and in immigrant-rich communities. During a hearing on the case in April, it appeared that a majority of the justices was prepared to allow the administration to include the question.

But the explosive new evidence disclosed by the plaintiffs in the case ought to give the justices pause about the ruling they’re about to issue. This is one of the most consequential cases before the court this term. The decision on it will have far-reaching effects on the distribution of political power and federal funding across the country for the next decade and beyond.

According to the plaintiffs who brought the New York challenge to the citizenship question, Mark Neuman, a key adviser to Mr. Ross on census issues, and John Gore, a Justice Department official who oversees voting rights enforcement, gave false or misleading testimony during the course of the litigation about why the Trump administration was so intent on including a citizenship query in the decennial count.

The files show that he wrote to President Trump’s transition team to tack the question onto the census and helped to write a draft Justice Department letter claiming that the question was needed to enforce the 1965 Voting Rights Act. That was the pretext the administration later used to justify its decision to include it — and which Judge Furman rejected.

Judge Jesse Furman of Federal District Court, the first of three judges to strike down the citizenship question, has asked the Justice Department to respond to the charges and has scheduled a hearing for next week.

Lawyers challenging the citizenship question told Judge Furman on Thursday that, according to a 2015 study written by Mr. Hofeller, adding a citizenship question would create “a structural electoral advantage” that would benefit Republicans and non-Hispanic whites. The documents were unearthed last year by Mr. Hofeller’s estranged daughter, who found them among his effects on four external hard drives and 18 thumb drives.

The files show that he wrote to President Trump’s transition team to tack the question onto the census and helped to write a draft Justice Department letter claiming that the question was needed to enforce the 1965 Voting Rights Act. That was the pretext the administration later used to justify its decision to include it — and which Judge Furman rejected.

Mr. Neuman admitted in a deposition last year that Mr. Hofeller was the first person to suggest the addition of the citizenship question. The plaintiffs accuse Mr. Neuman and Mr. Gore of providing false testimony in their explanations for this whole charade.

“The new evidence demonstrates a direct through-line from Mr. Hofeller’s conclusion that adding a citizenship question would advantage Republican and non-Hispanic whites” to the rationale advanced by the Justice Department, the lawyers wrote.

In a civil rights case, this would be powerful evidence that the Trump administration took the action for the express purpose of disadvantaging minorities. This, however, is a case dealing with administrative rules, which require officials to act in good faith and offer legitimate reasons for advancing a particular policy goal.

An accurate and fair count of everyone in America isn’t just any policy goal. There’s much at stake with the 2020 census — from the future of the next redistricting cycle to how billions of dollars in federal funding will be allocated. The Supreme Court should see this new evidence for what it seems to reveal: A blatant attempt to rig a constitutional mandate.